The World sub-developers 'in trouble'
Dubai, January 8, 2009
Signs of a deep downturn in Dubai's property market intensified on Thursday as government-owned developer Nakheel entered financing talks with banks over a major project and a second hallmark project faced delays.
Nakheel, developer of off-shore island projects like The Palm and The World, is talking to banks about financing for its sub-developers as some for The World have trouble making payments, a Nakheel spokeswoman said.
Separately, low-income residents evicted from areas to be bulldozed to make way for a $95-billion luxury project called Jumeirah Gardens have been allowed to return, according to newspaper The National.
The developer for Jumeirah Gardens, government-owned Meraas, has made no decisions about what portions of the project will be cancelled or delayed, a spokesman said, declining to comment on whether existing residents had been allowed to return.
Returning residents would likely signal that authorities have delayed or cancelled portions of the massive project as Dubai, the self-styled tourism and financial hub of Gulf, suffers under the strains of the global financial crisis.
Meraas said in December that it would scale back massive project.
At The World, some sub-developers are having difficulty making payments while others are having difficulty finding financing so they can begin construction, a Nakheel spokeswoman said.
"There are some developers who are having trouble making payments," said the spokeswoman. "There are other developers who have been making payments and taken possession of their islands and want to start construction...but they are going to have trouble getting financing now for construction," she said. "We want the project to keep moving ahead."
In an interview with The National, Hamza Mustafa, the managing director of The World, said Nakheel needed banks to finance sub-developers, who had little access to liquidity due to the crisis. -Reuters
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